Retail Watchers

Said to be an all cash deal from Kroger.

I can't see how the FTC will allow it - especially in many areas of the west. California AG would certainly sue.

The details will be in the divests, because there will be a LOT of divests... and how banners will be handled with the divests...

My guess is Kroger wants NorCal and Chicago. Also suspect this may be a way for Kroger to unload QFC.

This isn't great news for the consumer.

I'd rather see Kroger buy outright the NorCal and Chicago Albertsons assets since those are really the only decent assets, and let the rest of Albertsons try to carry on and see how things go.

CalItalian wrote: ↑October 13th, 2022, 8:22 am Said to be an all cash deal from Kroger.

I can't see how the FTC will allow it - especially in many areas of the west. California AG would certainly sue.

They could sue and the same old thing would happen. Both are union operators. They can find another unionized buyer like Haggen to divest stores to.

Given there is basically no overlap in NorCal, the main issue is SoCal. I suspect they could broker a deal to divest the entire F4L operation (including the Chicago part of it) to satisfy concerns.

Not a fan of this deal. I believe it will lead to lower quality and higher prices.

Well, this would be a good thing for flailing Acme in the Northeast (and other Northeast/New England divisions) where Kroger has no presence. But as already said by others, there is a ton of overlap in most other regions.

storewanderer wrote: ↑October 13th, 2022, 8:51 am The details will be in the divests, because there will be a LOT of divests... and how banners will be handled with the divests...

My guess is Kroger wants NorCal and Chicago. Also suspect this may be a way for Kroger to unload QFC.

This isn't great news for the consumer.

I'd rather see Kroger buy outright the NorCal and Chicago Albertsons assets since those are really the only decent assets, and let the rest of Albertsons try to carry on and see how things go.

Kroger wanting Chicago is a sign of how badly they mismanaged Mariano’s. And they could probably scoop up Raley’s or Save Mart if NorCal was a valuable market.

My area has the following markets within a 5 mile radius:
1 Albertsons
1 Vons
1 Food4Less
1 Superior
2 Ralphs

If this was to go through, all but 1 market would be owned by Kroger.

It will be interesting to see how they handle divestitures, assuming this goes forward.

Will they divest by region, or will they divest by individual market. For example, in Oregon, would Saf-er choose to divest the entire Fred Meyer operation vs. the entire Safeway/Albertsons operation, or would they go market by market and try to keep the best locations and divest the losers (more or less like Albertsons did with Buttrey in Montana). They could try to keep the rural Safeways while keeping the metro Fred Meyers, or something like that ...

And what happens to the Safeway (or Albertsons) brand if they try to, for example, hold on to Safeway in NorCal but hold on to Fred Meyer in Oregon? Who keeps the Safeway name? Or do you have multiple operators of the same name in different regions? That didn't work well when Albertsons tried it.

Off the top of my head, I would assume major divestitures in Washington, Oregon, SoCal, Las Vegas, maybe surgically in Idaho (Fred Meyer isn't terribly dense in Idaho except in Boise and there are only a handful of Smith's stores left), presumably some in Texas and I assume some in the Midwest. You'd almost have enough divestitures to make a reasonably sizeable regional chain of some sort.

It's unclear to me if greater scale would really help this hypothetical behemoth compete with Walmart any better. I'm really not convinced that it's lack of scale that is Kroger or Albertsons' problem.

From the financing standpoint, are they going to take on a bunch of debt that will lead to more divestitures down the road and/or a weak balance sheet that forces more sale-leasebacks, etc.

This will be fascinating to watch.

We would have to decide whether to call the combined company Krogway, Krogsons, Saf-er or Alb-er.

I think some events up to this point have been done in preparation for this.

That investment group with little history but ex Cerberus people who bought Save Mart: they could easily take all CA divests, plus F4L, and run those under Save Mart (we all know how well that idea would go, but they certainly keep stuff open forever trying and have a tract record of keeping stores open.....). Plus their offer has improved the past couple years.

Raleys is the other one who did their structure changes and has said they want to buy additional chains. They could also take some of these divests (a move I predict would be a total and complete disaster, Haggen like). I don't think Raleys attitude would work at all in WA or OR where divests are likely (smaller and medium markets), and Las Vegas and NM are already attempted. Raleys was profitable in NM though...

I see no divests in UT. CO would be another big mess, just send the Safeway CO division which is very troubled to AWG and Homeland it. ID/WY/MT maybe a store here and there but Associated would pick those up in a second.

I can not fathom this going through in my area without a "big" company taking many divested stores.

I do not imagine Staters as a candidate for this area.

Whom else?

An outsider?

A specialty (Whole Foods, Gelsons, ethnic, Amazon Fresh, etc.)?

This is very bad.........................very very bad!